Global Ship Lease – Q1 21 numbers

PRESS RELEASE 

Global Ship Lease Reports Results for the First Quarter of 2021

Declares Dividend of $0.25 per Common Share

May 10, 2021 08:00 ET | Source: Global Ship Lease Inc.

LONDON, May 10, 2021 (GLOBE NEWSWIRE) — Global Ship Lease, Inc. (NYSE:GSL) (the “Company”, “Global Ship Lease” or “GSL”), a containership charter owner, announced today its unaudited results for the three months ended March 31, 2021.

First Quarter 2021

– Reported operating revenue of $73.0 million for the first quarter 2021.

– Reported net income available to common shareholders of $4.2 million for the first quarter 2021 after $5.8 million premium paid on the full optional redemption of our outstanding 9.875% Senior Secured Notes due 2022 (“2022 Notes”) on January 20, 2021, an associated non-cash write off of deferred financing charges of $3.7 million and of original issue discount of $1.1 million, a non-cash charge of $1.3 million for accelerated stock based compensation expense due to vesting and new awards of fully vested incentive shares, and a prepayment fee of $1.6 million on the partial repayment of our Blue Ocean Junior Credit Facility, giving normalized net income⁽³⁾ of $17.8 million.

– Generated $44.7 million of Adjusted EBITDA⁽³⁾ for the first quarter 2021.

– Declared a dividend today of $0.25 per Class A common share for the first quarter 2021 to be paid on June 3, 2021 to common shareholders of record as of May 24, 2021, more than double the $0.12 per Class A common share announced on January 12, 2021, as a result of subsequent fleet growth and success in rechartering.

– During the first quarter 2021, raised a further $10.7 million net proceeds under our ATM program for our 8.75% Series B Preferred Shares (“Series B Preferred Shares”). During the period from April 1, 2021 through May 7, 2021, a further $10.3 million net proceeds was raised under this ATM program.

– During the first quarter 2021, raised a further $15.1 million net proceeds under our ATM program for our 8.00% Senior Unsecured Notes due 2024 (“2024 Notes”). During the period from April 1, 2021 through May 7, 2021, a further $7.6 million net proceeds was raised under this ATM program.

– On January 12, 2021, Moody’s upgraded our Corporate Family Rating and the issue rating of our 2022 Notes to B2 / Positive from B3 / Positive.

– On January 19, 2021, fully drew down a new $236.2 million senior secured loan facility with Hayfin Capital Management, LLP (the “New Hayfin Facility”). The proceeds, together with cash on hand, were used to complete on January 20, 2021 the full optional redemption of our outstanding 2022 Notes.

– On January 20, 2021, upon the redemption in full of our 2022 Notes, the 250,000 Series C Perpetual Convertible Preferred Shares held by KEP VI (Newco Marine) Ltd. and KIA VIII (Newco Marine) Ltd. (together, “Kelso”), both affiliates of Kelso & Company, a U.S. private equity firm, were converted into 12,955,188 of our Class A common shares.

– On January 26, 2021, closed our fully underwritten public offering of 5,400,000 Class A common shares, at a public offering price of $13.00 per share. The underwriters exercised, in part, their 30-day option to purchase on February 17, 2021, an additional 141,959 Class A common shares. The aggregate net proceeds, after underwriting discounts and commissions and expenses, were approximately $67.8 million.

– On February 9, 2021, announced that we had agreed to purchase from and charter back to Maersk Line, seven 6,000 TEU Post-Panamax containerships with an average age of approximately 20 years for an aggregate purchase price of $116.0 million. During the period from April 1, 2021 through May 9, 2021, four ships have been delivered. The remaining ships are scheduled for delivery during the second and third quarter of 2021. In April 2021, we entered into a new credit facility with HCOB for six of these seven ships and have drawn down three tranches of $10.7 million each, amounting to a total of $32.1 million. We expect to enter into a new credit facility shortly to finance the fourth ship delivered to date.

–  On April 13, 2021,  Kelso and Maas Capital Investments B.V. sold an aggregate of 5,175,000 Class A common shares in an underwritten public offering at $12.50 per share (including 675,000 Class A common shares that were sold pursuant to the underwriters’ exercise, in full, of their option to purchase additional shares). We did not receive any proceeds from the sale of these Class A common shares.

– On April 16, 2021, we drew down in full on a new $51.7 million secured credit facility to refinance one of the three existing tranches of the $180.5 million Deutsche, CIT, HCOB, Entrust, Blue Ocean Credit Facility that had a maturity date on June 30, 2022.

– On May 7, 2021, we drew down in full on a new $51.7 million secured credit facility to refinance the second of the three existing tranches of the $180.5 million Deutsche, CIT, HCOB, Entrust, Blue Ocean Credit Facility that had a maturity date on June 30, 2022.

– Since January 1, 2021 and excluding the seven ships we have contracted to purchase, agreed 11 charter extensions or new charters for our existing fleet, adding approximately $280.9 million of contracted revenues and $204.1 million of expected aggregate Adjusted EBITDA. The charters were for five 2,200 – 2,800 TEU feeder ships, one 5,100 TEU Panamax, and five 5,900 – 6,800 TEU Post-Panamaxes. Charter durations ranged from approximately 21 months to over four years, with shorter durations for the smaller ships and longer durations for the larger ships. Rates were up significantly against those previously contracted. Including the seven ships contracted for purchase, we have added approximately $300 million of expected aggregate Adjusted EBITDA since January 1, 2021 calculated on the basis of the median firm periods of the respective charters.

George Youroukos, Executive Chairman of Global Ship Lease, stated, “The strong containership market momentum of late 2020 has further accelerated in 2021, positioning the sector for levels of profitability not seen in many years. While factors such as port delays, shortage of equipment, and congestion in the Suez Canal have provided support at the margin in tying up containership capacity, the present market conditions are based on the fundamentals of underlying strong demand growth set against limited supply, resulting in effectively full employment of the global containership fleet. Given the multi-year construction time for new containerships, we expect constrained supply to persist through at least the medium term – particularly in the workhorse mid-sized and smaller classes where we focus – resulting in continued market tightness.”

“In the meantime, we continue to agree new charters for lengthening durations at increasingly attractive rates. We have also maintained our disciplined but active approach to growth through opportunistic secondhand vessel acquisitions, utilizing our balance sheet and strong cashflows to add immediately accretive, charter-attached tonnage with compelling upside potential and limited downside risk. We have made continued progress in this regard, having already taken delivery of four of the seven 6,000 TEU ships that we have agreed this year to acquire, and we remain optimistic that further such opportunities exist in the market. Having transformed our balance sheet, established a track record of continuous, disciplined growth, substantially expanded our charter durations and contracted revenue, and with today’s declaration of an increase to $0.25 per common share of the previously announced sustainable quarterly dividend based upon reliable, long-term cashflows, Global Ship Lease is advancing on all fronts as we utilize the strengths of our fleet and charter portfolio to create lasting value for our shareholders.”

Ian Webber, Chief Executive Officer of Global Ship Lease, commented, “Even as we have remained very active in pursuing growth and additional long-term charter cover, we have also taken the opportunity of the highly supportive market backdrop to further strengthen our balance sheet, reduce our cost of capital, and enhance our overall financial resilience and capacity to pursue opportunistic growth. In the first four months of 2021, by the full redemption of our restrictive 2022 Notes and our other refinancing initiatives, we have refinanced $330.6 million of debt, removed all but $54.4 million of maturities through end 2022, and dramatically improved our debt service and amortization profile while reducing our blended cost of debt from 6.4% to 5.5%. With these enhancements, an improved credit rating, the initiation of a sustainable quarterly dividend at an increased level due to our fleet expansion and the continuing success in rechartering ships at higher rates for longer periods, and increased trading liquidity enabled by our improved free float as a result of our recent equity offerings, we believe that we have materially improved Global Ship Lease’s attractiveness as an investment at this very exciting time in our history.”

The full release can be found here.